SES Sees Pay TV Revenue Increasing 34% Worldwide in 2016

SES SA (SESG), the world’s largest publicly traded satellite operator, sees pay-TV services as “a key driver” of growth in the telecommunications industry globally over the next four years.

Pay TV is forecast to generate industry revenue of $259 billion in 2016 from $194 billion in 2012, Leszek Bujak, sales director for Central and Eastern Europe at SES, said in an interview in the Serbian capital Belgrade yesterday.

“With continuous decline of fixed subscribers, stagnancy in subscriber growth in telephony and broadband, pay-TV service becomes a key viable complementary service,” Bujak said.

The Luxembourg-based company, whose customers include Telefonica SA (TEF), Spain’s biggest phone company, has 52 satellites and is adding capacity to accommodate demand.

The fastest revenue expansion of 18 percent is estimated in South America, followed by 11 percent in Asia Pacific and 8 percent in Europe, Africa and the Middle East, Bujak said. In North America, the revenue level may remain unchanged, he said.

Pay-TV penetration will probably increase on all continents except in North America in the next four years, according to the SES forecast based on research by the IHS Screen Digest, he said. The penetration will grow most in South America, reaching 54 percent through 2016 from 40 percent in 2012.

It will decline to 83 percent from 86 percent in North America in four years, while growing 5 percentage points in Europe and 9 percentage points and Asia-Pacific to 65 percent and 79 percent respectively. Africa and the Middle East will see the smallest, 1 percentage point increase in penetration to 15 percent.

Falling Prices

The growth may be supported by falling prices for high- definition TV sets, now at less than 700 euros ($939) a piece from more than 4,000 euros five years ago, he said.

“HD is becoming a standard and people start to expect good quality,” which also helped reduce the replacement cycle for TV by 10 percent over the past three years to 7.5 years.

Average viewing time is also expected to increase, now at 3 hours and 16 minutes globally, as will the average size of new TV screens sold, now at 35 inches (0.89 meter), he said.

To contact the reporter on this story: Misha Savic in Belgrade at msavic2@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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